Europe shares bounce back; KPN sinks

PARIS Feb 5 European shares rose on Tuesday as
signs of economic recovery in the euro zone helped soothe
investors' worries a day after the return of political risks in
Spain and Italy sparked a selloff in stocks.

"Yesterday's spotlight on Southern Europe was just an excuse
to book profits and catch our breath. The trend is still
positive, and clients are slowly coming back to equities,"
Kepler Capital Markets sales trader Patrice Perois said.

"U.S. earnings are much better than expected, there is no
worry on that front, and apart from a few accidents in Europe
such as KPN today and Saipem last week, results have
been relatively good here."

Markit's Eurozone Composite PMI, seen as a good indication
of economic growth, last month climbed to a 10-month high of
48.6 from 47.2 in December, an upward revision of the
preliminary reading of 48.2.

Euro zone banks featured among the top gainers, with Banco
Santander up 3 percent, BBVA up 2.3 percent
and BNP Paribas up 1.9 percent.

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